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Why Zacks? Learn to Be a Better Investor. Forgot Password. For most teens, reaching the legal driving age is a huge milestone in their lives. Probably long before your teen actually passes the driving test, he's dreamed of the car he wants to get. If you give a vehicle to your teen to use, you can assign the car title over to him. Title transfers are fairly straightforward; however, your state may have laws regarding teens owning property that impact this process.
If your title still lists a lien holder even though your loan is paid in full, you must request a notarized lien release from the lender.
Use the form on the back of the title to sell or transfer ownership. It states all of the information to enter into each area. You must provide the teen's full name and address, for example.
Additionally, you will likely fill in the car's VIN number, odometer reading and sale's price. Once you have completed the form entirely, both you and the teen need to sign. Your state may require the signatures to be notarized.
Like the other components of the title transfer process, taxation is also state-specific. States commonly impose a tax on cars that are given as gifts.
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However, some states, such as California, offer an exemption for transfers made between family members. If your state offers an exemption, you'll need to complete the required paperwork or forms.
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The federal government imposes a gift tax on the donor, unless you're giving to a charity. Check with the IRS for current amounts.
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